Saturday, June 11, 2011

International Monetary Fund lending to Greece has already blown away any previous borrowing records based on country contributions to the world’s last-chance bank.

That fact, along with the increasing likelihood the IMF will lend the failed economy even more cash and hasn’t required talks with private creditors, is underscoring concerns by emerging markets that the fund favors rich countries and may further undermine the bank’s perceived legitimacy.

The IMF says the extraordinary lending is not just to save Greece, but the world economy. “Our programs are designed to of course support an individual country so that they can restore financial stability, but the goal is to support the global international system,” said fund spokeswoman Caroline Atkinson.

IMF officials say the risk of European contagion is ring-fenced. But economists say the sheer size of the loan compared to Greece’s contribution to the fund, called its quota, indicates how scared the IMF is about Greece’s failure affecting the euro zone.